Autodesk 2011 Annual Report Download - page 77

From time to time, we receive claims alleging infringement of a third party’s intellectual property rights,
including patents. Disputes involving our intellectual property rights or those of another party have in the past
and may in the future lead to, among other things, costly litigation or product shipment delays, which could harm
our business.
We retain ownership of software we develop. All software is licensed to users and primarily provided in
object code pursuant to either shrink-wrap, embedded or on-line licenses, or signed license agreements. These
agreements contain restrictions on duplication, disclosure and transfer.
We believe that because of the limitations of laws protecting our intellectual property and the rapid, ongoing
technological changes in both the computer hardware and software industries, we must rely principally upon
software engineering and marketing skills to maintain and enhance our competitive market position.
While we have recovered some revenue resulting from the unauthorized use of our software products, we
are unable to measure the full extent to which piracy of our software products exists. We believe, however, that
software piracy is and can be expected to be a persistent problem that negatively impacts our revenue and
financial results.
In addition, through various licensing arrangements, we receive certain rights to intellectual property of
others. We expect to maintain current licensing arrangements and to secure licensing arrangements in the future,
as needed and to the extent available on reasonable terms and conditions, to support continued development and
sales of our products and services. Some of these licensing arrangements require or may require royalty
payments and other licensing fees. The amount of these payments and fees may depend on various factors,
including but not limited to: the structure of royalty payments, offsetting considerations, if any, and the degree of
use of the licensed technology.
See Item 1A, “Risk Factors,” for further discussion of risks related to protecting our intellectual property.
PRODUCTION AND SUPPLIERS
Production of our PSEB, AEC, MFG and certain M&E software products involves duplication of the
software media and, for certain products, the printing of user manuals. The purchase of media and the transfer of
the software programs onto media for distribution to customers are performed by us and by licensed
subcontractors. Media for our products such as DVDs and USB flash drives are available from multiple sources.
We offer our maintenance customers an electronic software download option for selected product updates.
Customers who choose electronic fulfillment receive the latest version of the software from our vendor’s secure
servers. For certain of our products, user manuals are made available by request only as we work toward
reducing our cost of shipping and production as well as the use of natural resources. User manuals and packaging
materials are produced to our specifications by outside sources. Production is either performed in leased facilities
operated by us or by independent third-party contractors. To date, we have not experienced any material
difficulties or delays in the production of our software and documentation.
EMPLOYEES
As of January 31, 2011, we employed approximately 6,800 people. None of our employees in the United
States are represented by a labor union; however, in certain foreign countries, our employees are represented by
work councils. We have never experienced any work stoppages and believe our employee relations are good.
Reliance upon employees in other countries entails various risks that possible government instability or
regulation unfavorable to foreign-owned businesses could negatively impact our business in the future.
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